(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01058R000201490001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: January 12, 2017
• Document Release Date: April 26, 2010
• Sequence Number: 1
• Publication Date: June 3, 1985
• Content Type: REPORT

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Central Intelligence Agency
Washington, D. C.20505
DIRECTORATE OF INTELLIGENCE
3 June 1985
TAIWAN: Maneuvering for the Succession
Summary
Since last summer Taipei has been rocked by a series of
domestic and foreign scandals and is now awash with rumors
of an impending government reorganization, and of a sharp
decline in President Chiang Ching-kuo's health. This highly
charged atmosphere has generated uncertainty over Chiang's
succession plans as well as the stability of a successor
regime--particularly if Chiang were to die in the next
several months.
We expect Chiang) to make 25X1
several key personnel changes soon to restore confidence in
the party and government as well as the traditional balance
between moderates and conservative leaders, who have accrued
increasing power over the last year. If current speculation
proves accurate, Premier Yu Kuo-hua will step down in favor
of the more moderate Li Huan, 68.
If Chiang dies soon, however, we believe the
conservative old guard would dominate any successor
regime. Unlike moderates such as Li Huan, the
conservatives, in our opinion, would be inclined to press
the United States for more open support, designed in part to
undercut the growing US-China relationship. In our
judgment, the younger generation of more liberal mainlanders
and Taiwanese politicians, whom Li Huan and former Premier
Sun have helped advance, would be unlikely to challenge the
This memorandum was prepared byl (Foreign 25X1
Affairs Branch, China Division, Office of East Asian Analysis.
It was coordinated with Directorate of Operations. Research was
completed on 29 May 1985. Comments and questions are welcome and
should be addressed to Chief, China Division, OEA 25X1
EA M #85-10107
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conservatives for power unless the conservatives tried to
undo the political reforms set in place since 1972 with
Chiang's blessing. Instead, these younger leaders probably
would be content to wait for time to catch up with senior
party mandarins.
Sun's Stroke and the Succession
Former Premier Sun Yun-hsuan's stroke in February 1984 threw
President Chiang Ching-kuo's carefully crafted succession plans
into disarray. Sun--whom the President had clearly chosen as his
heir apparent--commanded the respect and support of both the
mainlander old guard and the younger generation of mainlanders
and Taiwanese. A capable administrator, Sun was widely regarded
as someone who could give Taiwan the stability it needed after
Chiang's death. Moreover, Sun had surrounded himself with
several young advisers, both mainlander and Taiwanese, whom he
was grooming to assume increasing authority as the old guard
began to pass from the scene.
In our judgment, Chiang appointed Yu Kuo-hua to the
premiership last June to buy time while he worked out new
arrangements for the succession. Yu's mandate has been limited
to handling the day-to-day operation of the government, promoting
steady economic development, and training the younger
generation. As Premier, he has adhered to conservative economic
and foreign policies and has done little to reach out beyond his
own peer group or small circle of conservative cabinet members
for support.
Stimulus for Change
The Yu government has not fared well over the past year. It
has been rocked by a series of foreign and domestic scandals that
have tarnished its image, both at home and abroad, and have
raised serious questions about Yu's leadership. The murder of
Chinese-American writer Henry Liu has been particularly
embarrassing to the Taiwan authorities and has led to calls in
the Legislative Yuan for Yu's resignation. Yu's authority has
also been weakened by his government's inability to cope
effectively with China's efforts to isolate Taiwan and by growing
factional infighting between conservatives and moderates, who are
critical of his unimaginative economic policies and hardline
foreign policy views--such as insisting on "Republic of China"
nomenclature in international organizations.
In our judgment, the odds are increasing that President
Chiang will take steps later this summer to deal with these
problems. The President, in fact, indicated last year that he
would make important personnel changes this year, suggesting that
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even then he regarded the Yu government as only transitional.
Recent lower level personnel moves in the party and rumors that
both the Premier and Minister of National Defense would step down
have fueled speculation in Taipei that a major shakeup is
imminent.
A Li Huan Government
According to the American Institute in Taiwan
the leading candidate. for the premiership is Minister
of Education Li Huan, now 68. A close associate of the
President's for a number of years, Li has held several key
positions, allowing him to develop a more extensive network of
influence than most other mainlander politicians. Although he is
not now a member of the Kuomintang (KMT) Central Standing
Committee, Li has established political associations with a large
number of younger politicians, both mainlander and Taiwanese,
including Minister of Interior Wu Po-hsiung and Justice Minister
Shih Chi-yang. These contacts were formed during his 20-year
association with the China Youth Corps--a body that, like
Communist youth leagues, recruits and develops party officials--
and the KMT Organizational Affairs Department (1972-1978). We
believe these credentials, which Li alone among the senior
mainlanders in the cabinet possesses, place him in a position to
act as a bridge between native Taiwanese politicians and the more
conservative mainlander elite--ideal qualifications if Chiang
intends to restore the conservative-moderate balance.
. If Li were to assume the premiership, we would expect him to
press the following policies:
-- A return to the low-key diplomacy of the Sun era, placing
more emphasis on promoting economic relations abroad and
-less on protecting Taiwan's official "Republic of China"
nomenclature.
-- The appointment of more Taiwanese and younger mainlanders
to senior 'government and party positions--particularly
those whose careers Li has sponsored.
Implementation of moderate economic reforms, designed to
move Taiwan further away from a labor-intensive to a
technology-intensive economy.
Li would have to move cautiously to avoid antagonizing the
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old guard, who were responsible for his four-year "exile"1 in
Kaohsiung. Indeed, for Li to consolidate his position and
successfully redirect existing policies, he would need the full
backing of the President. Otherwise, senior party mandarins who
will, in all likelihood, continue to dominate the Central
Standing Committee probably would be able to cripple his
effectiveness.
If Conservatives Retain Control
In our judgment,. if Chiang's health were to fail or if he
were to die before implementing any significant personnel
changes, power would fall by default to conservative party
elders, such as Premier Yu and Shen Chang-huan, secretary-general
of the presidential office. Yu, however, has no broad network of
supporters--so important in Chinese politics--and might step
aside in favor of Shen or another senior mainlander. In our
view, such a government would be based largely on the support of
other members of the KMT old guard, who are already in their mid-
to-late seventies.
The leaders of the military and security services would also
play a key behind-the-scenes role, with the power to veto certain
appointments and policies. Above all, they would be interested
in maintaining order and would, in our judgment, be able to do
so. If pressed hard enough, they would certainly crack down on
the Taiwanese opposition and might press the government to slow
the Taiwanization of the KMT and government structure to ensure
continued mainlander control of the policymaking apparatus.
We doubt that the President is grooming his second son,
Chiang Hsiao-wu, as his successor. A target of much speculation
in the opposition press who has been portrayed as a "sinister
figure," the younger Chiang does not have an independent power
base, nor does he hold any official party position that would
allow him to accrue the power needed to succeed his father. Even
if his father threw his support behind his son, we doubt that any
of the old guard would do more than pay lipservice to the
President's wishes while he was still alive. On the.basis of AIT
1 Li was forced to accept "ministerial responsibility" for
1977 election rioting and resigned his party posts. His
resignation may, in fact, have been engineered by party
conservatives, who feared Li had developed too large a political
following. From 1981 until his return to Taipei 1
President of Chung Shan University in Kaohsiung.
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reporting, we believe that there is no enthusiasm for the younger
Chiang among either conservatives or moderates
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We believe that a continuation of conservative control of
the policymaking apparatus would result in a continuation, in the
short term, of current domestic and foreign policies. Inherently
cautious, a collective leadership of conservatives is unlikely to
deviate from policies previously approved by the President--
particularly Chiang's policy of "no contact, no negotiations"
with Beijing.
Possible Reaction From the Younger Generation
Because the younger, more moderate politicians have no
strong leader--with the possible exception of Li Huan--to support
them at a senior level, they are unlikely to mount a challenge to
the old guard for control of-the party and government. In any
event, most of them believe that time is on their side, and
probably would resign themselves to waiting.
There have already been substantial changes at the middle
level of the KMT, and these changes probably will gain momentum
over the next five years as more senior mainlanders who came to
Taiwan with Chiang Kai-shek die. For example, Yu Kuo-hua is 71
and Shen Chang-huan is 72, and neither one is likely to play a
key role for more than a few years beyond Chiang's death. In the
meantime, we believe the younger generation probably would
continue to snipe at the conservatives' policies and press for
further economic and political reforms.
Probably the greatest threat to the stability of a
conservative regime would be an attempt by senior party mandarins
to block the Taiwanization of both the party and government--a
policy that has had the President's backing since 1972. We
believe that such an attempt would provoke sharp political
infighting that could lead to the defection of some Taiwanese
politicos to the opposition--which is weak and divided--and
broader disaffection among the Taiwanese majority. We believe
that the conservatives are well aware of this danger and probably
would continue to promote some Taiwanese to senior
long as they did not threaten mainlander control.
Implications for the US
Regardless of any personnel changes the President may or not
make, his death would have little immediate effect on the basic
thrust of Taiwan's foreign policy. Taipei will continue to rely
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on Washington for support in order to fend off reunification
overtures from Beijing. Taipei will continue to regard US arms
sales in particular as a key ingredient in that support. A Li
Huan government would be less likely than a conservative one to
take a dogmatic approach to foreign policy and to try to disrupt
the US-China relationship. We doubt, however, that Li--a
mainlander--would be any more willing than the conservatives to
initiate talks with Beijing for fear of arousing latent Taiwanese
fears of a "sellout" designed to perpetuate mainland dominance of
On the. basis of US Embassy) I we believe
that Beijing will regard Chiang's death, as the beginning of the
end of mainlander rule of the island.
Beijing believes that his successors would be even
less inclined than Chiang to hold reunification talks. Even so,
we believe Beijing would try to entice Chiang's successors to
negotiate. At the same time, Beijing probably would place
renewed pressure on Washington to speed up a reduction in arms
sales to Taiwan and to play a more active role in promoting
direct, but probably secret, talks between Taipei and Beijing.
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Subject: Taiwan: Maneuvering for the Succession
Distribution:
1 - Gaston Sigur, NSC, Room 302, OEOB
1 - David Laux, NSC, Room 302, OEOB
1 - Honorable Paul Wolfowitz, Assistant Secretary
1 - James Lilley, Principal Deputy Assistant Secretary
Bureau of East Asian and Pacific Affairs, Room 4318,
Department of State
1 - Donald Anderson, Director, Office of Chinese Affairs,
Bureau of East Asian and Pacific Affairs, Room 4318
Department of State.
1 - Robert Drexler, Director, Office of Regional Affairs,
Bureau of East Asian and Pacific Affairs, Room 4310
Department of State
1 - John J. Taylor, Director, Office of Analysis for East Asia
and the Pacific, Bureau of Intelligence and Research,
Room 8840, Department of State
1 - Mark Pratt, Director, EA/RA/Taiwan Coordination, Room 4312,
Department of State
1 - James Kelley, Deputy Assistant Secretary for East Asian
and Pacific Affairs, Room 4E817, Pentagon
1 - John Sloan, DIO for East Asia, Room 2C238, Pentagon
1 - Ronald Montaperto, JSI-3A, Room 1C945, Pentagon
1 - Byron Jackson, Office of Intelligence Liaison, Room 6854,
Department of Commerce
1 - Robert Perito, Chief, China Office, East Asian and Pacific,
Room 2317, Department of Commerce
1 - Executive Director, Room 7E12
1 - DDI, Room 7E44
1
1
1
-
NIO/EA,
Room
7E62
-
C/EA/RR.,
Room
5D10
-
C/EA/CO,
Room
5D38
1 - C/PES, Room 7F24
1 - PDB Staff, Room 7F30
1 - CPAS/ILS, Room 7G50
5 - CPAS/IMC/CB, Room 7G07
1 - D/OEA, Room 4F18
1 - Research Director, Room 4G48
1 - OEA/China/Division, Room 4G32
1 - OEA/China/Foreign Affairs Branch, Room 4G32
1 - OEA/China/Domestic Policy Branch, Room 4G32
1 - OEA/China/Development Issues Branch, Room 4G32
1 - OEA/China/Defense Issues Branch, Room 4G32
1 - OEA/China/Southeast Asia Division, Room 4F38
1 - OEA/China/Northeast Asia Division, Room 4G43
1 - OGI/ECD/IT: Room 3G46
2 - OCR/ISG, Room
1 - DDO/EA/E== Room 5D54
1 - OCR/CH, Room lH18
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1 - NIC/Analytical Group, Room 7E47
1 - C/DO/PPS, Room 3D10
1 -
1 -
1 -
?DDI/O
EA/CH/FOR
(29 May 1985)
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